New Distribution Channel Structure for Scoops Ice Cream
Reasons for Creating a New Channel Structure for Scoops
Distribution channel plays a significant role in the success of any business organization. Restricting the distribution channel for Scoops will play a major role in its success. The current distribution channel is only suitable for small containers. In this case, they will not be in a position to handle large sized containers. As such it is important to restructure the distribution channel so as to promote distribution of large-sized containers as the company intends to penetrate into new markets. After the TV show, it is evident that the firm will be in a position to attract more customers. Different people will be willing to taste the ice produced by Scoops. As such, it is important to restructure the distribution channels and establish new channel structure for the company due to the various reasons.
Firstly, creating new distribution channels will enable the firm to enter a new market (Mallen, 2013). These are markets that the existing distributors may not be in a position to access. As such, Scoops will in a better position to sell its ice to the markets that it was not in a position to access before. The existing distributors are not able to supply the entire market. Restricting the distribution channel will enable the firm to reach new consumers. For instance, using direct sales will allow Scoops to appeal to more customers.
Secondly, creating new distribution channels allows the Scoops to overcome its competitors in the market. Since Scoops is a small firm, restructuring the distribution channel will enable it to penetrate markets that are dominated by the big retail companies. In this case, they will be in a position to offer a broad range of products at lower prices thus attracting more customers. Since Scoops has been able to produce the best ice cream, using direct sales will enable it to build a sound foundation and attract customer’s loyalty.
Thirdly, restructuring the distribution for Scoops will enable it to increase its profit margin. The firm only produces small-sized quantities of ice cream. Restricting the existing distribution channel will allow the firm to distribute large-sized portions of ice cream thus allows the business to gain a sound basis in the market (Christopher, 2016). Since Scoops has been recognized to be producing the best ice cream, creating new distribution channels will enable the firm to increase its returns on profit. The new distribution channel will allow Scoops to find a new market for large sized quantities ice cream. As such, the Scoops will be in a position to increase its profit margin.
Lastly, creating the new distribution channel will enable Scoops to achieve its marketing objectives. The firm will be in a position to start producing large-sized ice creams. In this case, the firm will be able to match the products to the needs of the market. Besides, Scoops will be able to persuade prospective buyers to favor their products as opposed to large corporations. This can be achieved by utilizing personal selling. Personal selling will enable Scoops to build a strong foundation in the market and expand its market share. Restructuring the distribution channel will also enable Scoops to avoid risks that are associated with the existing distribution channels (Christopher, 2016). Creating new distribution channel will allow Scoops to incorporate new technology that will allow it to reduce distribution cost thus increasing the profit margin.
- Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson Australia.
- Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
- Mallen, B. (2013). Selecting channels of distribution: a multi‐stage process. International Journal of Physical Distribution & Logistics Management.